Wednesday, 10 November 2010

The Equality Act 2010 and compromise agreements

For settlements not made through ACAS, a compromise agreement with the employer is only binding if it is a 'qualifying compromise contract' (s.144(4) EqA). This means the agreement must be duly compliant with certain conditions. One such condition is that the claimant received 'independent legal advice' (s.147 EqA).

A potential conundrum has arisen because of the new Equality Act definition of who can count as an 'independent adviser' so as to make a (non-ACAS) agreement enforceable (s.147 EqA). The literal interpretation of the way this section is currently drafted suggests that a solicitor who was instructed by the employee prior to the production of the final agreement for consideration is precluded from acting any further.
Despite a failure to refer to any departure from the old law in the Explanatory Notes to the Act, Section 147(5)(d) sets out that a complainant’s solicitor is a person “who is acting for a person” who is, per section 147(5)(a) and (b), either “a party to the contract or the complaint” or “connected to” such a person. On that basis section 147 (5)(d) would prohibit them from being an “independent adviser”.
The Government Equalities Office however has stated that 'the situation that existed prior to passage of the Act' remains unchanged and, by implication, that a solicitor who had advised a client in respect of an action would also be able to provide advice on a compromise agreement.

According to their web site, The Law Society has requested an urgent meeting with the Government Equalities Office to consider how this question can be resolved as well as notifying the Home Secretary of their concerns. They intend to produce a practice note soon.

By Charles Price
No5 Chambers


HCL Hanne & Co said...
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HCL Hanne & Co said...

A very interesting read.

Please see our recent blog on this topic;

stephenn richardsonn said...

There are many contracts signed between an employee and employer.Compromise Agreement is one of them.

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